The Primary Basis of Accounting for Inventories Is Cost

question 81

Multiple Choice

The primary basis of accounting for inventories is cost. A departure from the cost basis of pricing inventory is required where there is evidence that when the goods are sold in the ordinary course of business, their

• A) selling price will be less than their replacement cost.
• B) replacement cost will be more than their net realizable value.
• C) future utility will be less than their cost.
• D) cost will be less than their replacement cost.

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Definitions:

Double Bond

A chemical bond between two chemical elements involving four bonding electrons instead of the usual two.

Major Product

The main substance produced in the greatest quantity from a chemical reaction.

Stereoisomeric Forms

Different forms of a compound that have the same structural formula but different arrangements of atoms in space.

Allylic Bromides

Organic compounds containing a bromine atom bonded to an allylic position, which is one carbon away from a double bond in a hydrocarbon chain.